tv Boom Bust RT January 14, 2020 11:30pm-12:00am EST
when we were in the side of the. sea in the cartoon you can but i'm the symbol for the car and then by the. by now i'm by the on the move on. this is boom bust broadcasting around the world and covering all aspects of business and how it affects us all i'm christy i bring to bear in washington here's a look at what we have on deck wells fargo's stock continues to slump in the wake of its major accounts scandal with fines taking a big hit on the company's bottom line partly nailer
a public service and gives us his take on what lies in store for the banking goliath and how the sector has performed in recent times then as one bank has left another has their j.p. morgan and you part profit we take a look at the best in the final quarter of 2900 and what does it mean for the forecasts of the u.s. economy going forward without a mess of the out of messing with it so many stories so little time so let's go and dive right at. the head of the anticipate assigning a phase one the u.s. treasury has decided to remove china's designation as a currency manipulator never mind the fact that china should have never even been labeled that in the 1st place according to the i'm up commodity traders and analysts are now doubting these insane amount that china is committing to buy from the us under phase one of the trade deal china will pledge to buy over $50000000000.00 more in us energy and increase ag purchases by 32000000000 over 2 years which is above the 24000000000 baseline these totals will suppose. lee trim
about 300000000000 annually from the trade gap between the 2 countries however commodity experts remain skeptical that china can even absorb these quantities without threatening trade ties with other suppliers global markets are lackluster today as they struggle to digest the news and analyze how this deal will affect them how much china's commitment to buy $200000000000.00 of trade impact other countries and their access to the world's biggest economy analysts also point out that depending on the wording and the implementation the agreement could also violate the w t o's principle of most favored nation treatment a treatment which prohibits governments from discriminating between their trading partners it could also potentially violate the b.t.o. rules that prohibit quotas and other numeric restrictions on imports and exports so while the very legality of phase one is being questioned it's very fortuitous for the us that the w t o just so happens to be crippled and has lost its ability to rule on new disputes cases why is that a veto coupled only because the u.s.
has been blocking appointments for 2 years paralyzing the appellate body render it frozen and unable to issue rulings smart move getting rid of the referee so that he can't blow the whistle at you for cheating you know kristie i think there's an interesting question here with the w. cio being hamstrung because they don't have enough of an appellate body to actually make any rulings anymore what happens if that agreement of keeping up these purchases with products and whatever else it may be if china doesn't buy those from the u.s. and frankly if the u.s. doesn't sell them what happens then that continues to be a question that the analysts are remaining very skeptical of phase one how it will be enforced in the 1st place because as we previously mentioned it's not a matter of if china will be fall in this phase one it's when because these purchasing amounts are just just rationally completely except in saying they topped the over the baseline previously before the test or even implemented and i think i have one more question on this is you know when we look at the currency.
manipulator status 1st actually more important than the christian polluter status why make the agreement if you can hold it up the agreement is just good optically for both sides it's good for president trump because he is going into reelection and this way he can tout that oh we are decreasing the trade deficit we this is a complete win for the us look at all these new ad purchases that we got china to commit to and for china it's a win for them because in this case they cannot focus on trade they got some tariff rollback so the industry isn't hurting as much and this gives them an opportunity now to focus more so on the domestic issues at hand and to that point we were talking about with the currency manipulator status why say their currency manipulator than the i.m.f. says no they're not and then the us backs off on it when they get their 1st part of the deal it was a trump card that the u.s. kind of played and tried to use as a leverage calling a country a currency manipulator was actually a very bad thing back in the days and 2 decades ago even but nowadays with the internet and with everybody of getting available to public information saying that
the i.m.f. is calling them not a currency manipulator that kind of fits the purpose of even playing that card in the 1st place so the fact the car was non non gamer and so the u.s. now pulling back they're making a big show of it saying oh we're pulling it back in good faith when really it was a nonstarter to begin with what phase one being signed on the 15th wednesday that's tomorrow we'll keep an eye on this for sure absolutely. ford is investing $82000000.00 to expand its plant to eastern vietnam in an attempt to boost capacity from $14000.00 units to $40000.00 units per year the company reported that it sold over 32000 cars in 201931 percent from a year earlier in contrast to its performance in mainland china where sales were actually down 26 percent this additional investment will also help to reduce vietnam's reliance on imported vehicles and lower the country's trade deficit ford
also plans to further expand its network of $22.00 dealerships and outlets and will continue to introduce enhanced sales and after sales services and programs ford is extremely bullish on vietnam's growth potential future market investing heavily on infrastructure and becoming one of the country's biggest foreign direct investment automakers. amazon is planning to ask a judge to temporarily block microsoft from working on a high profile cloud contract with the united states department of defense the commerce and web services giant has taken issue with the government awarding the $10000000000.00 jet i contracted to microsoft saying the trumpet ministration had shown quote improper pressure and quote and bias against amazon u.s. defense secretary mark esper shut down the insinuation saying the decision to choose microsoft was done fairly and with any without any outside influence now according to the court filing on monday amazon will file a motion for the temporary restraining order on the 24th of january with
a federal court issuing a decision on the matter by the 11th of february the jet i project is part of a plan to modernize the u.s. army sort services with greater technological capabilities it will eventually give the military more seamless access to data and the cloud from remote locations. time now for a quick break but here because when we return well continue to take a beating in the wake of a major health fine thank you to the company bottom line naylor public citizen gives his take on what you are for the embattled banking goliath how the banking sector one time. and one bank has left another has surged j.p. morgan has come in. we take a look at excess in the final quarter. and what that could mean for the u.s. economy.
descriptions sound appetising even for the owners. to choose industry is telling us. it's really more of the. stein what they want to sell us then was necessarily good for the pet turns out that food may not be as healthy as people believe and we have animals that have you know diabetes in arthritis they have auto immune disorders they cut allergies we are actually creating these problems and it's a huge of a demagogue problems all of them i believe can be linked to very simple problem of diet and some dog owners so heartbreaking stories about their pets less treats the larger corporations are not very interested in proving or disproving the value of their food because they're already making a $1000000000.00 on it and there's no reason to do that research.
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a name volkswagen managers have been charged with fraud by german prosecutors who say they deliberately misled officials and consumers ahead of revelations of the diesel emission scandal in 2015 you were a member of that volkswagen was found to have intentionally program some vehicles with diesel engines to only activate emissions controls during testing now the indictment says that executives knowingly and willingly participated in the development refinement and improvement of manipulation software german prosecutors said 3 more executives aided and abetted the acts related to the scandal in a statement on tuesday prosecutors allege 9000000 vehicles were illegally cleared for the road due to the falsified testing now vehicles meant for the domestic market were also incorrectly exempted from a german road tax in $2900.00 charges of a similar nature were brought against volkswagen c.e.o. martin winterkorn and 4 other employees investigations into 32 more defendants are ongoing. nissan and renault shares have tumbled to multi-year lows monday as
investors grow concerned about the state of the 20 year old french japanese alliance rumors have surfaced over the weekend that nissan plans to separate and dissolve the alliance the relationship between the 2 companies has grown toxic according to the financial times and dramatically worsened following the arrest and 20. he reported that discussions for separation were underway and that a full split would force both carmakers to seek new partners in an industry that is contracting year over year nissan denies these rumors tuesday claiming that nissan is in no way considering dissolving the alliance critics see this as it is growing increasingly difficult to navigate for an independent company and to find a new partner in this rapidly consolidating industry were not is recovering 1.3 percent after nissan denied a separation. wells fargo bank on tuesday reported devastating earnings for the 4th quarter of 2019 citing low interest rates and legal costs hurting their bottom line
now the bank reported a profit of 2700000000 for q 4 that's a 53 percent decline year over year from $6060000000.00 in q 4 of 20 team wells fargo has faced restructuring and regulatory issues since 2016 and at that time the us government cracked down on the bank to 2 wells fargo's employees creating millions of fake accounts for customers to meet sales goals newly minted c.e.o. charles scharf said of the issues wells fargo is a wonderful and important franchise that has made some serious mistakes and my mandate is to make a fundamental make the fundamental changes necessary to regain the full trust and respect of all stakeholders sharf added that his focus since taking the helm has been doing the required regulatory work and improving the bank's financial results so joining us now to take a look deeper into this we are joined by bartlett naylor financial policy advocate with public citizen bartlett it is so great to have you here on the show again and
i want to 1st ask you know all of this really is stemming from a 2016 situation where we saw these wells fargo employees and really we believe say employees as if it's the employees fault but in reality was the bank pressuring them to make sure that they met sales goals and they were basically threatened with their jobs so but this all stems from that so that's we're 2 years out from that situation. where is the bank now and have they cleaned up this situation in the 1st place i don't know that they've cleaned it up that's where it began when regulators began to take a closer look at once was considered a benign bank and since then at least 11 more unrelated regulatory actions have taken place so the total number is is is 12 now yes you have the fake accounts where people were given various credit card and other add ons to their account without knowing it but then you have auto insurance fraud you have investors being scammed you have mortgage modifications being done you have over charges for overdraft fees you have so many more part of me thinks the regulators are simply
looking carefully at wells fargo if they looked as carefully as some of the other banks you might see some similar problems one that's what i was going to say you say they were relatively benign because if you remember after the financial crisis of 2008 into the 2000 section when everything was being restructured wells fargo was kind of they came out kind of clean they were like we don't need the bailout but the government kind of forced them to take the bailout so they could be part of the the greater bank brotherhood and they took care of it they got out of it very quickly and yeah they didn't have so many problems but now it seems like ok maybe those were those under the surface or did this kind of come following all of that i i think that it was their public citizen put out a report that the increase in add ons to accounts has been true since before 2000 that they were showing for example when they purchased walk cobia during the middle of the crisis that they could continue to grow accounts and touches that every account had with the with the client and i we believe that was was fake that they were actually fabricating some of those numbers and as you say they were
terminating employees that didn't meet their quotas they had this 8 is great you should have 8 in or interactions with each account i think one of the problems with wells fargo is it's crimes are easy for you and i to understand mortgage securitization fraud is a little bit more difficult i mean and they did commit that one too but j.p. morgan goldman sachs did. some stuff whose vocabulary is beyond many of us to understand but in terms of perversion i would say that j.p. morgan goldman sachs and others are just as problematic as as wells fargo is just that wells fargo screwed people on a retail level as opposed to a higher level now prior to this entire revelation well it was actually a growing bank with huge profits and a really fast lender division as well since they have since this entire scandal blew up they've had stagnating earnings of just under 7 percent year over year compared to citibank and bank of america who are up more than 30 percent last year
so are they doing enough at this point to get back on the right track or is this all is this regulatory issue a death knell for wildfire now they're actually under a size restriction growth i mean the federal reserve has put them on a cap that they can actually grow i actually think in addition to that that consumers looking for a bank while banks are sticky it's kind of hard to leave your wells fargo or any bank account when they have the choice there is so much bad news about wells fargo that they are deciding to go to one of these other banks. and finally to your question i would say that there could well be managed accounting going on right now you have a new c.e.o. he would like to paint as black a picture as possible so that he can look good in the next quarter or the next year contrasting with that with jamie diamond who is arguably in his his final years he wants to show that he's leaving with a bang with a bank at wells fargo is 2 trillion dollars wells i'm sorry j.p. morgan is 3 point something trillion dollars they're only earning one percent or
roughly of assets there's a lot of management decisions that can be made to either stifle or expand on what you're reporting as a profit and then the given quarter absolutely and moving on to j.p. i want to talk about them because they're on the other end of the spectrum here they're q. for profits they grew 21 percent. which marks a record reference revenue for any bank in a 4th quarter for their regular in the 4th quarter now as we look at possible economic downturn in the coming months and that's what we've been talking about i mean are these numbers inflatable should they be making this big jump is everything on the up and up with them as of right now yeah and again i bring a natural skepticism to all of what they report and they again i think that management has a decision about what to report and when that said i think that all of the big banks are playing with fire because they are highly leveraged for every dollar of their own money they have $9596.00 of borrowed money with interest when the cost of
that borrowed money changes just a little bit they're going to have a whale of a problem so i see that the banks as we saw in 2008 didn't weather the crisis and we have a very generous federal reserve with relatively low interest rates and when the cost of money goes up i think they're going to see some problems in bartlett i want to get to this but i can make you have time today but el paso electric and j.p. morgan chase bank and what that relationship with the bank actually purchasing energy concern but we're going to get that to another day so i appreciate you joining us bartlett naylor financial policy advocate with public citizen thank you so much for joining us here today thank you. and standing by to give us the market reactions to bank arnie's and to break down the latest unicorns that are attempting to go public we bring and. try to grip so the banks finish 20 on a tear outpacing the broader stock indexes in the 4th quarter but banks now face pressure this year as interest rates still stay low or even quote potentially even be flash further earnings are decent at the bulge bracket liquidity seem to still
be an issue the fed still has to continuously prop up the repo market and now the latest 2 week term it was the most oversubscribed since december so what's happening here as last week the fed just pumped $259000000000.00 into the market. there hasn't been a clear answer as to why there is a lack of liquidity if you go back to september 2019 there was that time where we saw the quick flash to 10 percent and people didn't know if it was because it was a sketchy person wanted to buy them a sketchy company want to borrow the money or what the reason was then it kind of blew over fed injecting more money but there's not a clear answer as to why there's a lack of liquidity which for me is always a little bit concerning i don't know if it's going to blow over or it's going to turn into a bigger issue the one thing i will say is look at how fast it went from 2 percent to 10 percent and then it makes me think back to the stock market in general
december 2018 how hard we came off we always go down faster than we came up you see these big moves quickly when there's any kind of uncertainty so it's just a reminder to always have your guard up as an investor and expect the unexpected. goldman sachs is set to report their earnings on wednesday this comes as their reorganizing the business to do more closely resemble their peers and grow in retail banking category now it seems like they're diversifying their revenue streams tell us about the shift into becoming a digital and what do you expect to be their main focus there. the digital back is going to be called marcus i don't know who's in charge of their marketing. but it's being run by adam dell who was actually the brother of michael dell so that families had a history of success and when it comes to goldman sachs i don't think it's a near term success story i think this will play out over time but they're like.
someone you just don't bet against because they find a way to win that's always been goldman sachs' reputation they make good relationships they win so they're never a company i would bet against but i don't see this as immediate gratification i think this is something that will take time to build and for people to feel comfortable with now let's turn over to the new i.p.o. market this year casper slate the mattress company is now filing for an i.p.o. and its founder philip is apparently obsessed with getting a $1000000000.00 valuation now recently with a look at the comps like time for the sealy and sort of simmons all that valuations have plummeted in recent years and the street is no longer being friendly towards the cash burning profitable silicon valley startups so what makes them think that they're different from any of the other we work live on all the others are blown up before them when hitting the public market. what makes them think that it makes me
think that because i don't think that you know they have they have a unique c.e.o. believes in that he wants what he wants but let me tell you a quick story why this was an amazing baseball player he got offered 140000000. a contract by the detroit lions after his trade from the rangers he turned it down he thought he was worth more the next year he agreed to a $10000000.00 deal and his numbers never went out from there so when you could have had a $900000000.00 deal with target and you turned it down because you think you're worth a 1000000000 i mean if it's that close i call it possible questionable leadership but then we look. you know the former c.e.o. of snap chat who held out for the better deal and he proved to be right so you know we don't know what they're seeing on the inside sometimes you get a leader who's just too bold other times you have someone who has the vision to realize what they're worth i don't know enough to comment on which were there you go but i have a conservative personality so for me i wouldn't be stingy about needing that
$1000000000.00 number $900000000.00 would be just. another me about the detroit tigers they're not the lions but let's go into the next one here there's another crop of unicorns gearing up to i.p.o. this year 2020 air b.n. b. robin-hood door dash posh mark and more now did they learn from these last years disasters or are they going to be hopping on hoping for the best here and to exit on the top of the market now and quickly here we got about 30 seconds left. i think what you saw last year has to humble them a little bit so you could see lower prices and they're also going to want to get it ahead of the election the election brings uncertainty and volatility and those are negatives for i.p.o.'s and that's imagine you know you look at what happened with lift once they went public all the lawsuits that come out and i wonder if air b.n. b. is a sitting duck that once they go public you're going to start to see all the lawsuits because now the public is funding the defense of them so i think they're going to
be less greedy than the c.e.o. of casper when it comes to valuations at a mesh of the administrators group thanks so much for your time today thank you. as the new apple generation embraces era pods which were one of the best selling presidency after 2019 what do you do with that piles of outdated cord and wire ear pods while most of us trash hip hop artist. he and samuel copland are repurposing them into fashion statement earrings these babies cost $40.00 and according to the artist represent the chaotic tangled journey of our past they aren't the 1st to think of turning your pa's into joy at the sellers have been doing this for years monetizing on the fact that apple ear buds are instantly recognizable now christie your are the fashion icon well when ben swans are here of course if you're the fashion icon of boom bust would you wear. earrings i am not that big of a techie to wear something like this but it is your birthday today so would you
like a 40 dollar by hearing my ears have appeared since i was in high school so i don't think so and that's it for this time you can catch boom bust on youtube dot com slash boom bust r.t. see you next time. in the united states presidential candidates debate the future of the u.s. and the world. next kaiser and stacy her but dig into the burning questions of this election cycle. every week. tax student debt trade wars corporate money universal basic. and more catch up with what's front running this sunday exclusively on our.
as the democrats gear up to officially start their 2020 presidential primary it is fitting to assess donald trump's performance in office a report card of sorts where is he kept his promises and where has he come up short will any of this really matter. and the money goes on my. side of. the painting was of a time about what was it was it a time that was in a sense as if i'm up as a moron about. what when or when the side of the. scene that i'm going to fit in but i'm before. them by the. now i'm by the imam obama.
you know world's big partners the new lot and conspiracy it's time to wake up to dig deeper to hit the stories that mainstream media refuses to tell more than ever we need to be smarter we need to stop slamming the door. and shouting past each other it's time for critical thinking it's time to fight for the middle for the truth the time is now for watching closely watching the hawks. descriptions sound appetising even for the owners so how to choose the pet food industry is telling us what to feed our pets really more based on what they want to sell us they must necessarily go. for the past turns out may not be as healthy as
people believe and we have animals that have you know diabetes and arthritis they have auto immune disorders allergies we are actually creating these problems it's a huge epidemic of problems all of them i believe can be linked to very simple problem of diet and some dog owners so heartbreaking stories about their pets less treats the larger corporations are not very interested in proving or disproving the value of their food because they're already making it a $1000000000.00 on it and there's no reason to do that research. it was obvious. to.
have you seen what's happened in around the protests are all decided. to offer a campaign rally donald trump appears to claim he's turning opinions in iran but as opposing demonstrations hit waiting capital over the accidental downing of a passenger plane are all no says the u.s. is exploiting the tragedy.